In this episode, Jason Hartman continues his discussion about economics and art. He explains why we should align ourselves with governments and central banks. He also explores how the value of art ties with real estate. Jason also resumes his interview with Saifedean Ammous about cryptocurrency, specifically Bitcoin. They talk about inflation, the possibility of the government making Bitcoin illegal, and the gold standard.
Guest 0:00
Talk about Yes, but first I need to I’m sorry, I have to drop this for a minute. But my wife just sold the chair and which I’m sitting. So
Jason Hartman 0:11
that is so funny. This is like an economics lesson right here. I love it. Yeah.
Guest 0:17
No, you don’t understand the running joke about people selling chairs to buy bitcoin is going on. Mark about this. I love it.
Jason Hartman 0:25
This is great. You know, of course, this show is about real estate investing. But in order to understand how to be a great real estate investor, one must understand the value of money. Does it have intrinsic value? Or is it just fake news. And that’s what money or currency government money is.
Announcer 0:50
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer, and entrepreneur who’s owned properties in 11, states had hundreds of tenants and been involved in 1000s of real estate transactions, this program will help you follow in Jason’s footsteps on the road to your financial independence day, you really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:40
Welcome to Episode 1643 1643. And today we have Part Two with Saife. Or his more formal name, safety and almost, and some fascinating insights into sound money, fiat money, and why this is important. Now, I must tell you, I am in the beautiful, gorgeous fountain blue Hotel in Miami. And I noticed that on the wall of our hotel room. You know, last time we talked about art, and why art is related to sound money. It was a correlation that I did not until recently understand until interviewing Saifedean. And we’ll be back with part two with him here in just a moment. But on the wall, there is a I don’t know, I wouldn’t call it a piece of art. Would you call that a piece of art?
Guest 2:39
No, I would not.
Jason Hartman 2:40
Okay, what is it?
Guest 2:41
A decoration?
Jason Hartman 2:42
It’s a decoration? Well, there’s a decoration on the wall in a frame. So some would consider that art I guess. And it is remember when you had to write? Well, you probably didn’t have to anymore. But in the old days, when kids did something wrong, they had to write standards, okay. And that means they had to write 100 times on the chalk board. Yes, they used to use chalk before whiteboards, and head right over and over or maybe on a piece of paper, I will not something right, whatever bad thing they did. So this one says I will not make any more boring art. And it’s written over and over on this piece of art, decorative, hit wallhanging, whatever it is. So just wanted to tie in the importance of this. And next week, hopefully, we’ll get time to talk about progress, technology and innovation. As it relates to sound money. Of course, we’ll have other guests talking about other topics. But I think this is so critically important to society. And of course understanding sound money, and fiat money. And inflation is so critically important to us as investors, because we of course, want to do what we want to align our interests with the most powerful forces the human race has ever known. Very, very important. align our interests with the most powerful forces the human race has ever known. And what are those governments and central banks. And by the way, I’m watching CNBC right now, the TV’s on no sound. And more talking about Robin Hood, all of this. Wow. It’s just amazing. So listen to this clip from Saifedean, who will be with us live here in just a moment. And then I want to just tell you a little bit about more about what I saw at the Norton a few days ago. And I think you’ll find this very interesting. So listen to this as we talk about how inflation and sound or unsound money influences art
Guest 4:54
results in free markets. The winners are always the ones who provide the goods deemed best by the Public government is in charge of deciding winners and losers, sort of people who have nothing better to do with their life and work as government bureaucrats are the arbiters of taste and beauty. Instead of our success being determined by the people who have succeeded in obtaining wealth through several generations of intelligence and low time preference, it is instead determined by the people with the opportunism to rise in the political and bureaucratic system best. A passing familiarity with this kind of people is enough to explain to anyone how we can end up with the monstrosities of today’s aren’t.
Jason Hartman 5:28
So remember, low time preference versus high time preference? What does that mean? That means when the money is unsound when it is not money that holds its value over time, and that’s, of course, what we have, not only in the United States, but of course, around the world. We have unsound money that does not hold its value over time. And it gets debased by inflation, because it is not of limited supply. And it is unsound in so many ways. we’ve, we’ve talked about that in 16 142. Prior episodes, I won’t go into it now, because it’s a rabbit hole. So the high time preference is where the mentality of people shifts to. Not that that was great grammar, sorry, I think you get it shifts to when we don’t have sound money. When we have sound money. There is a low time preference because we know that the money will hold its value. We don’t have that. So our entire society, not just in the US, but worldwide has become a high time preference society in instant gratification society, and that influences virtually everything in life. And by the way, I forgot to mention a last time, but I want to thank our client and venture Alliance member Keith Gibson, who actually booked this interview with Saifedean Ammous. So you heard part one of that on Monday and part two is today, and let’s listen to this clip before we get to him
‘Audio Clip’ 7:06
in their field fueled ever growing realm of control. Almost all modern governments dedicate budgets to finance, art and artists in various media. But as time has gone by, bizarre and barely believable stories have emerged about covert government meddling in arts for political agendas. While the Soviets funded and directed communist art to achieve political and propaganda goals. It has recently emerged that the CIA retorted by financing and promoting the work of abstract expressionist mattress and cardboard molesters, such as Mark Rothko and Jackson Pollock,
Jason Hartman 7:37
mattress and cardboard molesters. Okay, here we need a comment. Okay, because when we were at the Norton museum on Sunday, the Norton Museum in Palm Beach, right here in Palm Beach, Florida, we saw a, an exhibit called smashed cardboard, and it was basically like a smashed cardboard box hanging from the ceiling with a red
Guest 8:03
chain. It was like a resin made of cardboard, though, and it was neither aesthetically pleasing nor provocative.
Jason Hartman 8:11
So, so it wasn’t art.
Guest 8:15
And we also saw a pile of candy in a corner. And you are supposed to go up and take some Well, that makes the art interactive.
Jason Hartman 8:26
Yeah. Right. So let me just describe that better for the listeners. Okay. So this exhibit, in quotes is the art exhibit we saw was a joke, of course. And it was a bunch of green hard candies in cellophane wrappers, thrown into a corner of the museum. And I thought, well, is this just trash that they didn’t clean up? or What is this thing? But there’s a little card there on the wall that explains what the art is. And this art exhibit installation art, were these candies thrown up there? And then we kept reading the thing in disbelief that this was actually considered art.
Guest 9:08
I think you had to ask the man working at the museum. Is this art when he said he said yes, it is.
Jason Hartman 9:14
Yes, it is a point. And then we read on the card it said you can take one, right? So you can go and take one of these candies. And that makes the art interactive. Yes, very interactive. So is that art?
Guest 9:26
questionable? Very questionable. very questionable.
Jason Hartman 9:29
And think about that, though. That shows a high time preference, because it’s really easy to buy a bunch of green candies and cellophane wrappers and throw them in a corner versus the Sistine Chapel versus the David. Right. I mean, versus Monet or De Gaulle ha, thoughts.
Guest 9:53
I agree. And but the point of the candy as well was that it was unending, that supply was going to To be was going to be replenish replenish forever so that is an art exhibit that you can go see in 100 years.
Jason Hartman 10:07
Wow. So impressive. I doubt it will last as long as the system jelly though I just have a feeling now interesting.
Guest 10:16
serve as an American counter. Only with unsound money could we have reached this artistic calamity, where the two largest economic, military and political behemoths in the world are actively promoting and funding, tasteless trash picked by people whose artistic tastes qualify them for careers in Washington and Moscow spy agencies and bureaucracies have been replaced with the artistic equivalent of DMV workers. The result is an art world teeming with visually repulsive garbage produced in a matter of minutes by lazy talentless hacks looking for a quick paycheck by scamming the world aspirants to artistic class with concocted nonsensical stories about it symbolizing anything more than the utter depravity, the scoundrel pretending to be an artist who made it. Mark Rothko’s art took me hours to produce it was sold to gullible collectors holding millions of today’s unsound money, clearly solidifying modern art as the most lucrative get rich, quick scam of our age. No talent, hard work or effort is required on the part of a modern artist. Just the straight face and the snobby attitude and recounting to the nouveau riche why the splatter of paint on a canvas is anything more than a hideous thoughtless splatter of paint. And now their inability to understand the work of art unexplained, can be easily remedied with a fact check. What is astounding is not just the preponderance of garbage like Rothko’s in the modern art world. It is the conspicuous absence of great masterpieces that can compare with the great works of the past. One cannot help but notice that there aren’t too many sistine chapel’s being constructed today anywhere, nor are there many masterpieces to compare with the great paintings of Leonardo Raphael Rembrandt Caravaggio, or Vermeer. This is even more astonishing when one realizes that advances in technology and industrialization would make producing such artwork far easier to accomplish than it was in the golden era. the Sistine Chapel believe its viewer in all that any further explanation of its content, method and history will transform the art into appreciation of the depth of thought craft and hard work that went into it. before they became famous. Even the most pretentious of art critics could have passed by a Rothko painting neglected on a sidewalk and not even noticed it, but alone bothered to pick it up and take it home. Only after a circle jerk of critics have spent endless hours pontificating to promote this work. Will the hangers on and aspirin nouveau riche began to pretend there’s deeper meaning to it, and spend modern unsound money on it. several stories have surfaced over the years of pranksters leaving random objects in modern art museums only for modern art lovers to swarm around them in admiration, illustrating the acuity of our areas artistic tastes. But there is perhaps no more fitting tribute to the value of modern art and the many janitors that art exhibits worldwide who demonstrating admirable perceptiveness and dedication to their job, have repeatedly thrown expensive modern art installations into the dustbins to which they belong. Some of the most iconic artists of our era, such as Damien Hirst, Steve Metzger, Tracy emin, an Italian duo Sarah Goldschmidt, and Eleanor, Akira, have received this critical appraisal by janitors more discerning than the insecure nouveau riche, who spent millions of dollars on what the janitors threw away.
Jason Hartman 13:16
So the janitor in the modern art museum can just leave their mark in the corner, and someone will consider that an art installation. And
Guest 13:24
if it looks like garbage, it probably is. Yeah.
Jason Hartman 13:27
And so this is the interesting thing. So there’s a little bit of a flip side to this. And, you know, of course, this show is about real estate investing. But in order to understand how to be a great real estate investor, one must understand the value of money. Does it have intrinsic value? Or is it just fake news? And that’s what money or currency government money is, you know, I’m not a gold bug. I’m not a Bitcoin bug. But I do love collecting these phenomenal, artificially cheap, fixed rate mortgages and using them against commodities that have universal need. You know, it’s interesting. I’m speaking at this conference here in Miami this week. And when we were on the bus this morning to go on a little harbor cruise, the person sitting in front of us was talking about real estate investing, and talking about how he, I asked, I said, you know, what did you do before, how did you get into this? And he said, Well, I was a professor and I said, what kind of professor and he said psychology. And I said, well, as a psychology professor, all you really needed to do to become interested in income property in real estate as an investment was to simply refer to Maslow’s hierarchy of needs. And of course, all of you remember this because you undoubtedly studied it in some psychology book or class in high school or college, and at the base of Maslow’s hierarchy. Have needs which looks like a pyramid is the safety need. And safety essentially equates to what? shelter, shelter. People have three basic human needs food, clothing and shelter. And then their needs increase after that as they go up Maslow’s hierarchy to what Maslow considered the ultimate need. And I disagree with Maslow, by the way, but he called that self actualization. Now, I disagree. I think there is spiritual actualization or actualization in God, I think that’s a higher form than self actualization. But hey, you know, with a narcissistic culture we have, let’s go with self actualization. But real estate is right at the base of Maslow’s hierarchy of needs. So it’s a it’s a pretty great commodity. It really is. And so, one flip side, though, that sayfudine alluded to, and what he just said, Here is a clip from the Bitcoin Standard Book is that these collectors will spend millions and millions of dollars for this, essentially, trash. Why is that possible? Well, fiat money makes that possible. Because if they take a few great bets, on a few real estate deals, you know, a lot of art collectors or certainly real estate owners and developers, right, they take a few great bets. And all of this money comes into their hands, because they’re using my technique, inflation and do step destruction, whether they whether they realize it or not. And they are benefiting from the fiat money explosion, while others are getting hurt by it. So that money to them looks cheap to pay $120,000 for the banana, taped with duct tape, to a wall or a piece of canvas that we talked about on Monday’s episode. So this fiat money problem, and high versus low time preference problem works in multiple directions. And of course, you see that. So let’s go ahead and get to sayfudine almost otherwise known as safe. And let’s hear more about this.
Guest 17:20
been bitten by the bug and now you’re just like all the other Bitcoin? victims, you just, you know, thinking about it and thinking about how to serve Bitcoin and how to further Bitcoin? Because that’s it. You’ve been, you’ve been bitten. You got the bug? Right. Well, there
Jason Hartman 17:35
are certainly there’s no shortage of gold bugs in the world, right. You know, similar concept, I guess. But um, okay. So you don’t think that any government can shut it down? But they could make it illegal? Right. I mean, you know, like, what, the example I used over the years many times, in interviewing crypto experts is, is look, you know, cocaine is a commodity, right? It’s a it’s an illegal drug. It’s a commodity, right? People trade it, but it’s not traded widely, because it’s illegal, and people are afraid of going to jail. So, you know, but it is a commodity nonetheless. If they said Bitcoin is illegal, because you’ve got to use fed coin, for example, they’re their cryptocurrency, but they’ll eventually make, and they want to control velocity and inflation and so forth. Couldn’t that displace it? And and really hurt the store of value?
Guest 18:35
I don’t think so. I mean, first of all, let me just be clear, you know, the government’s can do all kinds of things. They can do whatever they want. Yeah. Well, within the realms of the laws of physics and economics, yes. But, I mean, I think the way that I see it is that ultimately, any, any kind of action against people, it can hurt this one, but it can’t eradicate it, that’s the difficult thing about it, it’s, it’s almost impossible to eradicate Bitcoin, because Bitcoin can shrink to the size it needs to shrink to in order to survive. You know, if you restrict people by it and restrict people mining it, the mining declines in volume and the price of bitcoin commodity declines in volume enough for it to be essentially able to run at a very small scale that is very hard to detect. So it fades into insignificance. But it doesn’t die. But then the fact that it doesn’t die, will likely spur rebirth and a sense. So we always have this, the fact that it’s not easy to eradicate, it means that you know, you don’t want to pick a fight with it because you don’t want to undermine your authority and credibility by taking a flight and then losing it. And then also the aspect of preferring to use now I think you’re correct in that central banks can introduce their own digital currencies. And in one of my recent podcasts, I discussed this in the Bitcoin standard podcast. But I think ultimately, these kind of currencies are really an advertisement of Bitcoin more than they are in competition to bed. Because what they do is they really serve to illustrate the Bitcoin value proposition, because when they show you is, you know, the national currencies that will be linked to the central bank, the reason they’re doing them is that they want to control monetary policy. And the reason I’m doing this is so that they can have full surveillance or financial transactions. So you have the two main value propositions of Bitcoin cannot exist in a central bank currency, because that’s the whole reason we have a central bank is because we want to have financial control over financial flows. And because we want to have control over inflation. So if you introduce a central bank, digital currency that offers the central bank, the ability to survey all transactions, and to unilaterally and arbitrarily arbitrarily set monetary policy, discretionary monetary policy, then all that you’re doing is just providing a much more efficient query illustrating the superiority of, you’re telling people, you know, you can have your digital currency, which is connected to the central bank and of the government, and that is being devalued every year at anywhere between five and 20%, depending on your luck. Or you can have Bitcoin, which has been divided every year at exactly this percentage, which we know exactly for going into the year, and we stick to throughout the year. And you know exactly how much it’s going to be devalued over the next 100 years. Whereas with national currencies, you have no idea what’s going to happen in five years, or maybe even one year. Last time,
Jason Hartman 21:49
we had any idea the right way, look, and when those national currencies start coming in digital form, as they inevitably will, that it will become extremely convenient for the powers that be governments and the central banks that issue them, and extremely negative for the population, because they can control so many things they can control. You know, undoubtedly they’ll come on your phone, they will control where you spend, which merchant, which merchants and businesses can accept the currency, how far they can be from your home. If there’s a lockdown or quarantine, for example. They may have expiration dates on them. So they can increase or decrease the velocity of money. They can devalue over time, maybe overnight, whatever. I mean, they can just do whatever they want. It’s the possibilities
Guest 22:45
are endless for them.
Jason Hartman 22:46
They can they can do it already with dollars, some of those things, but they can do so much more and so much more conveniently with a digital currency. Right? Absolutely.
Guest 22:56
Yeah. And really Bitcoin is I mean, I think people missed the point of Bitcoin when they think that the point is that it is digital, and that these currencies are digital, well, national currencies are digital, you know, and then the vast majority of dollars is not out there as dollar bills and coins. It’s digital, it exists on bank Ledger’s the physical dollars are a tiny little fraction of the supply of dollars. So the digital aspect is not something unique or interesting about it about Bitcoin more about central bank digital currencies. What’s unique and interesting about Bitcoin is the fixed monetary policy.
Jason Hartman 23:31
Absolutely. So as a segue to your new book, which is a really interesting thesis, talk to us, you You talk a lot in, in the Bitcoin standard about time preference. And can you explain what time preference is in what it has to do with currency time preference?
Guest 23:52
In, in the Bitcoin standard spend significant chunk of the book talking about time preference, because it’s one of the most fascinating, the most fascinating public in economics for me, and when I was at university, every class that I would teach every course that I would teach, I would always sneak in a lecture on time preference, whatever the topic of the course, I’d always have a lecture on time practice, I always tell students, you know, this might not be the most important thing for your exam. But this is going to be the most important lesson you’ll learn in this class, and probably in all of university. So you wake up and pay attention to this one. And because I really think it’s the most important thing economics teaches, time preference refers to the degree to the extent to which to the extent to which you discount the future compared to the present. So your time preference is a measure of how much more money would I need to give you one year from now, in order to take away a sum of money from you today. So, if you have if I owed you $100, that I needed to pay you today, what sum of money would you accept, for me to pay you the $100 plus interest next year. So the Answer is a 105, that effectively means that you discount next year by 5%. So you value $105, next year as much as you value $100 today. And so the higher your time benefits means, the more you discount the future, the less value attached to the future compared to the present. And the lower the time reference means the less you discount the future, so you keep attaching more and more value to the future. So it seems like a very simple concept, but it’s actually quite powerful understanding individual choices, and all manner of important questions in economics. So in, in, for instance, in the Bitcoin standard, I, I focus on this, because in my mind, it’s really the most important economic question in all of economics. And the trades that you do with your future self are more important than in trading to do with anybody else, you know, you trade with your employer or your supermarket, a once a day, or once a month or once a week, but you make trades with yourself. One of the 1000s of times every day, every single decision you make every day is a trade within yourself, you know, when you decide whether you’re going to have that cheesecake, after lunch, you’re making a trade between you know, you today being happy with the cheesecake, and you tomorrow, or next week being unhappy with your shape or with you being out of shape. That’s the old saying, you know, 30 seconds on the lips, 30 years on the hips.
Guest 26:32
Yeah, exactly. So it’s, it’s a really, really, really powerful analytical tool to start thinking about alternatives and decisions. Because you see that it applies to everywhere, you know, the example I like to get to university students is how you study for an exam, if you come into a course and you start studying for the material, day by day, and then you know, you’re constantly keeping a low time preference and prioritizing the end of the semester throughout the semester, and you get to the end of the semester, you review the material and you get a good grade. Whereas if you have a high time preference, then you discount the end of the semester very highly. So you spend all semester partying around and then you need to cram in the last couple of days and it doesn’t work. And and it applies in all manners of things in our personal life. And in my mind, I’m the reason I bring this up is because I believe that money is instrumental in determining time preference. And I discussed this in depth in the Bitcoin standard, as well as in my next book that we are standing. And in the economics textbook, which I’m running right now, which is a Principles of Economics, the way that I see it is, if money is hard, then you expect people to effectively or must begin even earlier, the reason that people hold money in the first place. The reason people use money as a technology is because it is it protects us from uncertainty, you know, if there was no uncertainty about the future, you would not need any form of money, because you could just simply make it so that all of your earnings come at the same time that you need to get your expenditures, and you don’t need to hold any money. So you know, your your paycheck comes in, and it pays off your bills at exactly the right time. Although you wouldn’t need the three components, you wouldn’t need the store of wealth component of money, right? Because you could you if there was no uncertainty, then you can just store your wealth in capital, you know, you can just hold stocks and companies and businesses instead of actually owning cash, and instead of owning cash. Now the reason you want to hold cash is because the future is uncertain, you don’t know the future. And so money is our way of hedging against uncertainty, it’s our way of providing for the future. The harder than money, the more we are able to provide for the future, and the less uncertainty we have about the future. So if we’re able to provide more for the future, and if we have less certainty about the future, well, then we have, we have less reason to discount the future. So our discounting of future declines, and so our time preference drops. So we now have a lower time preference. Basically, this is how I think money affects time preference.
Jason Hartman 29:01
Okay. So what does that do to us is, well, before I asked what it does to assist people, I want to ask you, is there a distinction between time preference and the time value of money that we’ve all heard of, which is just inflation, right? Is there a difference between those two?
Guest 29:19
I mean, they’re kind of related. But yeah, they’re distinct concepts. And I guess the time value of money is how much you’re discounting money over time, which is determined by time preference. Yeah. Okay.
Jason Hartman 29:35
So what is time preference? Do it really messes with our heads, doesn’t it save? It really sort of causes bad decisions, and it has huge knock on implications for culture and society, doesn’t it? Tell us about that? Which which, by the way, I believe is the subject of your new book. So feel free to
Guest 29:57
talk about Yes, but first, I need to online I have to talk to my wife just sold the chair in which I’m sitting. So
Jason Hartman 30:09
that is so funny. This is like an economics lesson right here. I
Guest 30:14
love it. Yeah. Knowing you don’t understand the running joke about people selling chairs to buy bitcoin is going on about this.
Jason Hartman 30:22
I love it. This is great.
Guest 30:26
replacement. Okay.
Jason Hartman 30:31
That is fantastic. Okay. Okay, so going back on now.
Guest 30:37
Well, I think you know, the the impact of time preference, I think money shapes it. But many other factors shape and time preference, really the lowering of time preference is the process of civilization. You know, as we become more civilized, as we become more human, more cultured, we become more future oriented, we start providing more for the future, we start accumulating more capital, and we start discounting the future more, we start becoming more future oriented, become more civilized, more peaceful. And, you know, that’s essentially the process of civilization. And I think it is, it’s inextricably linked to our ability to provide for the future, by holding money for the future. And by providing a Mumbai saving for the future and reducing the uncertainty. So when the money that we use begins to lose its value, when money starts becoming easier rather than harder, when money starts becoming less reliable as a mechanism of transferring wealth into the future, then money becomes the then that reduces our ability to provide for the future, it increases the uncertainty for the future. And that makes us discount the future heavier. But I’m not just in economic affairs in everything. And I think you see this reflected in all manners of economic and non economic decision making that people do in everything. And one, my favorite example maybe, might be art, you know, you look at art under the gold standard, you look at the golden era of art, artists would work on a masterpiece for years, and then the thing would be expected to survive for centuries. And much of that Argentinian system by first century, you look at 20th century art. And you see that people spend, you know, 15 minutes, scribbling a bunch of lines, and then they make up a story about how it represents something or the other. And
Jason Hartman 32:21
I love how you talk about that in the book, by the way, I resonated with that heavily. My favorite is the Impressionists. Okay, so that’s, that’s where I like, but when you talk about the Sistine Chapel, and Michelangelo, and then you look at a stupid banana with duct tape on a wall, and that’s been somehow art, I mean, give me a break. It’s just Yeah,
Guest 32:43
and I think, you know, it’s an excuse that we’ve blown up. But clearly,
Jason Hartman 32:48
I don’t understand how to interpret that banana on the wall. And of course,
Guest 32:51
exactly. We’ve spent our life basically being gaslighted by an art industry that wants to tell you that you know, the reason you don’t, and the reason you don’t see the bananas, because the problems with you, you’re not artistic in your culture, then maybe that is the case, but you know it, why is it those people that produce those things cannot produce anything that requires a little bit more time and attention? Why can’t they make a Sistine Chapel in between all of their bananas? Why is it all bananas and scribbles and random stories on empty pieces of Canvas, rather than anything that requires actual time and effort?
Jason Hartman 33:28
So what it sounds like what you’re saying, then, is that when we have a low time preference, we become more civilized? And the craftsmanship improves? Is that is that correct?
Guest 33:43
Very much. So. And across some simple craftsmanship is one part of it, it’s it’s just in my mind, the, you know, the the ability to hold wealth that you can trust, which is what people had under the gold standard, that you knew this coin was yours, and it’s gonna hold back into the future, that security, in my mind is what is necessary for people to be creative, to be creative, because the you know, they have the security and they’re producing because they want to produce. And it’s very different from the kind of creativity that you need to do when you’re on the treadmill, where you know that the money that you’re holding in your hand is like a melting ice cube, it’s losing its value, it’s not going to be there for you. And so you’re constantly having to continue producing more and more on that treadmill. I think that’s really the difference. of less than craftsmanship in art. I think it also reflects in innovation, you know, people, people think of 20th century as being the century of technology. But really all the things that we think of as 20th century technology were actually invented under the gold standard, and were popularized and commercialized and as they spread all over the world in the 20th century, but the main and most important innovations came in the 19th century. In fact, in the 20th century, we saw some regression, many of those things. So aviation Cars, the telegraph communication telephone. So many of the most important technologies that we’ve had 24 hour electricity, supply all these things that completely revolutionized our life, they came under the gold standard, I don’t think it’s an entirely, it’s entirely coincidental of what the gold standard allowed the world to do was to have a large global market where everybody trades with everybody else, and you have the ability for everybody anywhere in the world to save, you know, anybody could make returns that meet inflation affecting inflation at that time was negative one, negative 0%. So you just holding money, he allowed you to have appreciation, you didn’t have to be an expert investor, you didn’t have to study real estate,
Jason Hartman 35:47
you don’t have to take inordinate risk.
Guest 35:50
Exactly, right. You know, the same coin that you got paid in as a child or as an old man or as a worker, that same coin, you just have to keep hold of it. And that’s it. That’s your savings account. That’s your portfolio.
Jason Hartman 36:03
Right? And it was good as gold, if you will. And I don’t know, we’ve got to wrap it up here. But this is so fascinating, because, you know, when I think about that I definitely buy into this. However, it kind of strikes me that does the common everyday, Joe sixpack, think about that? Or is it so sort of just in the air, if you will, that it just influences everything? And we don’t even know it’s like a subconscious thing. And I almost wonder if it has a knock on effect, even to relationships, in business in love and romance, you know, divorce rate, I don’t know, how much does this really affect?
Guest 36:48
Oh, I think so. Absolutely. I think it’s highly pervasive everywhere, because it shapes, you know, time preferences there and everything in any decision. It involves a short term versus a long term outcome. And so, family I think is an excellent one. As people’s time preference rises, they are less likely to think about their future and more likely to think about their present. And I think you see this with time, you see that, you know, people have been people have developed a world in which they are far more likely to have many more temporary and short term relationships, rather than a fewer and much more long term relationships, which was the case a long time ago. And obviously, there are many other reasons. They’re the you know, the contraceptive pill, and the sexual revolution, and the female introduction to the workplace. Of course, all of that, of course, plays into it. But I think an important factor in it is that the move away from hard money to easy money has two economic impacts. Number one, it reduces the family’s ability to save for the future. And so reduces the incentive that parents have to provide for their children in the long run, or for children to provide for their family in the long run. And it reduces the incentive that people have to invest in a family, because it’s less likely to pay off in the long term, and also increases the emotional investment in the government or in the state as a replacement of the family. Because you know that devaluation, your savings are being devalued, because the government is effectively taking that extra money. And with that money, the government has so much more power that it can provide the family with a growing list of things. And so over the 20th century, over the century of government money, we’ve normalized the idea that it is government’s role to provide things like health care, and education and, and dietary guidance, and all kinds of different things that, you know, the government is supposed to solve for you and provide for you which, you know, historically, these are the kind of things that family was there for?
Jason Hartman 38:44
Well, you know, there’s this whole movement of men, and it’s just really, sadly, a kind of a big deal. called men going their own way, where they’ve just, they’ve just kind of given up, and they just don’t care, they don’t care to start families, they don’t care to find the love of their life. And they would say, the government has become the new husband. You know, it’s, it’s, it’s like, Since when was the government supposed to have this role of interfering in every area of our life like this, you know, people view relationships and culture in a much more disposable manner. When they have a short time preference, just want to make sure I’ve got this great hybrid versus they have a long time preference, your, you know, they consider their reputation to be more important and those relationships, I don’t want to burn bridges. That person might be useful to me in some way in the future. I’m going to act in a more proper way, because I’m going to value the future more. Whereas, you know, everybody just kind of becomes a hedonist and values the now if they have a short time preference, and it almost at first to me, but I’m really starting to see the connection seemed like a bit of a leap. To say, Well, that’s because of the currency. Right? I can see your point.
Guest 40:05
Yeah, I mean, yeah. A lot of people have the inclination to just laugh initially. But it’s so
Jason Hartman 40:11
funny when you think about it, it really, it really matters.
Guest 40:14
A lot of people think,
Jason Hartman 40:16
Yeah, well, sure. Because it’s instant gratification.
Guest 40:21
Actually, I think it’s hard work. Yeah, exactly. And I’m particularly thinking in particular, that it needs to involve several chains of reasoning when All right, well, this happens when that happens. So one of the things that thing, and then what does the implications of that? Right, that kind of reasoning is very hard for most people who, you know, prefer to just get to laugh at the things that their TV tells, sadly true. And,
Jason Hartman 40:45
you know, we see on social media today, it’s very apparent that we have at least a couple of generations of people that lack critical thinking skills. So you know, and you know, thinking is hard work. It’s not instant gratification. So I would agree, safe. Thank you for spending so much time for us. Wrap it up with any closing thoughts you have, give out your website, tell people where they can find out about your new book, whatever you like.
Guest 41:09
Yeah, you can go to my website sayfudine.com, or my Twitter as at sayfudine. And that’s spelled si FED a n n on seventeen.com, you can subscribe to receive weekly chapters of my forthcoming two books, the Principles of Economics and Fiat standard, you will get a new chapter every week alternating between the two books. And the two books should be finished, should be published in 2021 this year, so you’ll be getting a sneak preview of the chapters as they are being finalized if you sign up and you’ll also have access to my for online courses in Austrian economics.
Jason Hartman 41:47
Excellent, good stuff safe. Thank you so much for joining us.
Guest 41:50
Thank you so much for having me, Jason. Have a good day.
Jason Hartman 41:57
Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are the rain. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.